Iowa Supreme Court Attorney Disciplinary Board v. Ronald L. Ricklefs ( 2014 )

IN THE SUPREME COURT OF IOWA
No. 13–1965
Filed March 28, 2014
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
RONALD L. RICKLEFS,
Respondent.
On review of the report of the Grievance Commission of the
Supreme Court of Iowa.
Grievance commission recommends a thirty-day suspension of
attorney’s license to practice law. LICENSE SUSPENDED.
Charles L. Harrington and David J. Grace, Des Moines, for
complainant.
Ronald L. Ricklefs, Cedar Rapids, pro se.
2
MANSFIELD, Justice.
This matter comes before us on the report of a division of the
Grievance Commission of the Supreme Court of Iowa. See Iowa Ct. R.
35.10. The Iowa Supreme Court Attorney Disciplinary Board (Board)
charged that the respondent, attorney Ronald L. Ricklefs, violated several
of our ethical rules by failing to maintain proper trust account records,
commingling funds, and misrepresenting his trust account practices on
his client security questionnaire. After hearing the matter, the
commission found most of the alleged violations had occurred and
recommended a thirty-day suspension. Upon our consideration of the
commission’s findings of fact, conclusions of law, and recommendation,
we determine that all but one of the alleged violations took place. Giving
particular consideration to Ricklefs’s failure to rectify his trust account
problems despite a prior audit four years before, we suspend his license
to practice law with no possibility of reinstatement for three months.
I. Factual Background.
Ricklefs was admitted to practice law in Iowa in 1978. He is
currently sixty-one years old and works in Cedar Rapids as a solo
practitioner.
This case centers on a routine audit performed by the Client
Security Commission on Ricklefs’s client trust account and accounting
records in 2012. The audit showed noncompliance with our rules. Even
more worrisome, many of the same deficiencies had been uncovered in
an audit four years earlier and had been pointed out to Ricklefs, but
Ricklefs had not corrected them. We therefore begin our discussion with
the prior 2008 audit.
A. The 2008 Audit. On September 13, 2007, Thomas W.
McGarvey, an auditor with the Client Security Commission, contacted
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Ricklefs by phone. McGarvey attempted to set up an appointment with
Ricklefs on that day or the following day to conduct an audit of his client
trust account. Ricklefs said he was not available those days but
proposed meeting late the following week. McGarvey said his schedule
did not permit that, but indicated he would return to Cedar Rapids in
October and contact Ricklefs at that time to set up a meeting.
Accordingly, McGarvey called Ricklefs on October 10 and proposed
a meeting on either October 17 or 18. Ricklefs did not respond, so
McGarvey placed a second call on October 15 and insisted the meeting
needed to take place on October 19. Late in the afternoon of October 18,
Ricklefs attempted to reschedule. He indicated his recent transactions
had not been recorded and also claimed he was sick and likely to be out
of the office the following day. Ricklefs asked McGarvey to allow him to
submit the needed documents by mail no later than October 31.
McGarvey agreed to this plan but proceeded to interview Ricklefs
regarding his accounting practices during the October 18 telephone call.
Ricklefs told McGarvey he had reconciled his bank statements with his
trust account “from time to time” and also said his client ledgers were
reconciled to his trust account balance “in some fashion.”
McGarvey followed the phone call with a formal written request for
documents on October 23. Ricklefs failed to provide the documents by
the agreed-upon October 31 deadline. Therefore, McGarvey followed up
with a second request for the documents on December 28. He also asked
Ricklefs to explain why he had not provided the documents by the
original deadline. Again, Ricklefs failed to respond.
On April 23, 2008, McGarvey contacted Ricklefs by telephone and
requested to meet with him at Ricklefs’s office on April 24. Ricklefs
indicated he was not ready for McGarvey’s visit and his records were not
4
up to date. He also claimed he would be in depositions. After McGarvey
informed Ricklefs he was not in compliance and insisted on meeting with
him within ten days, Ricklefs consented to a May 1 meeting.
In the course of this audit, Ricklefs provided some client ledger
cards. However, it became clear that Ricklefs had been writing
numerous checks on his client trust account to cover personal expenses,
including payment of his rent and utilities, payments to his mother, and
payments for medical services. Ricklefs explained that these payments
were made out of earned funds or personal funds he had deposited into
the trust account. Ricklefs declined to answer when asked whether he
had a personal checking account. In any event, McGarvey concluded
that Ricklefs had been commingling client and personal funds.
McGarvey shared this finding with Ricklefs and provided him with a copy
of the trust account rules. McGarvey also turned in his audit report to
the Client Security Commission, but apparently no action was taken on
it at that time.
B. The 2012 Audit. In October 2011, Charles Brinkmeyer,
another auditor with the Client Security Commission, stopped at
Ricklefs’s Cedar Rapids office to try to conduct another routine audit of
Ricklefs’s client trust account records. Brinkmeyer was unsuccessful in
scheduling an audit that day and was provided with a myriad of excuses
from Ricklefs over the following weeks. Following multiple trips and
phone calls to Ricklefs’s office, Brinkmeyer insisted on meeting with
Ricklefs no later than February 9, 2012. Ricklefs finally agreed to that
date, and the meeting was set.
Brinkmeyer performed an initial interview and completed part of
the audit during the February 9 meeting. However, he was unable to
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conduct a meaningful review because of Ricklefs’s failure “to prepare or
maintain most of the required records.”
Ricklefs had not regularly retained trust account bank statements.
Ricklefs acknowledged he did not have all the statements and had to
contact the bank to get them. Ricklefs also admitted he did not maintain
a check register. Instead, he produced a blank register and told
Brinkmeyer he was willing to begin using it immediately. Brinkmeyer
observed that Ricklefs had retained only carbon copies of checks and
deposit slips in place of a proper checking account register.
For his client ledger, Ricklefs produced only a single page for a
single client, showing a $300 deposit made by that client on September
26, 2011. No other activity was shown for that client, and the ledger still
reflected the existence of the $300 balance as of the date of the audit.
Brinkmeyer concluded from his discussions that Ricklefs had not
prepared client ledger pages on a regular basis and the single page
provided had been prepared only recently.
Brinkmeyer determined it would be impossible for Ricklefs to
perform any required monthly reconciliations without the bank
statements or a check register. Despite Ricklefs’s claim that he did
monthly reconciliations, the reconciliations attempted by Ricklefs were
“not correct in either form or end result,” and Brinkmeyer noted it was
“apparent he is not in the habit of preparing” the reconciliations. In the
audit report, Brinkmeyer stated he believed “the entries on the six
statements provided to me today reflect his first-ever efforts to complete
such reconciliations.”
Even though the client ledger detail showed only a $300 balance
and Ricklefs claimed in the initial interview that his trust account
contained only client funds, his trust account had an actual balance of
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$2243.66. Ricklefs asserted the excess funds were money he had earned
and not yet removed from the account. However, he could not provide
documentation showing where the funds had originally come from.
As a result of the February 9, 2012 review, Brinkmeyer
enumerated a long list of deficiencies:
(1) Failure to retain client trust account bank statements[,]
....
(2) Failure to maintain a separate client trust checking
account (commingling of funds is apparent),
(3) Failure to maintain a check register,
(4) Failure to complete and maintain monthly 3-way
reconciliations,
(5) Failure to maintain client ledger account detail,
(6) Failure to satisfactorily identify or explain the source of
the “excess” amount in his trust account (bank statement vs.
the client ledger balance as presented to the auditor)[.]
When Ricklefs signed Brinkmeyer’s audit statement, Brinkmeyer
also requested “preparation and maintenance of a check register,
reconstruction of a client ledger for at least the most recent six months,
and that the attorney provide those documents to [him] no later than
March 31, 2012.” However, that deadline passed without Ricklefs
providing the additional information.
Ricklefs finally contacted Brinkmeyer via email on April 17,
apologized for the delay, and provided a five-page handwritten document
entitled “RLR Trust Account Check Ledger.” The document appeared to
be a reconstruction of the check register without the required six-month
reconstruction of a client ledger. Brinkmeyer responded and called
attention to Ricklefs’s failure to provide all of the requested information.
He commented on Ricklefs’s continued practice of commingling client
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funds with personal funds and expressed the importance of maintaining
separate accounts. Additionally, Brinkmeyer provided Ricklefs with a
copy of Iowa Court Rules chapter 45, advised him to become familiar
with the court rules, and told him to properly “reconstruct all client trust
records as required by the Rules, including the check register, client
ledger, and monthly reconciliations for at least the period of July 1, 2011
to the present.” Ricklefs was given a sixty-day deadline to respond to the
request and to set a time to meet with Brinkmeyer again.
When the sixty-day deadline passed without a response from
Ricklefs, Brinkmeyer emailed him on July 2, 2012, and asked for a
response by the end of business on July 6. Brinkmeyer indicated that if
a response was not received, he would forward his audit file for possible
referral. Ricklefs responded via email on July 5 and attached a new
document entitled “RLR Trust Account general ledger update” and
several bank statements. Ricklefs’s submission appeared to be
information that would be contained in a check register and was dated
from March 9, 2012, through June 1, 2012. However, an additional page
provided similar, but overlapping, information from May 11, 2012,
through June 19, 2012, and seemed to have been created from a bank
statement rather than contemporaneously.
Ricklefs’s email also contained information about the balances
attributable to two clients, while explaining no other client money was
being held. Several names in the check register that appeared with
deposits did not match the names of any clients Ricklefs had previously
disclosed to Brinkmeyer. The monthly reconciliations and historic client
ledger pages were, once again, not provided.
Brinkmeyer responded to Ricklefs in a lengthy email on July 19.
He reminded Ricklefs that some requested information was still missing.
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In addition, he requested additional information about unclear entries on
the check register for both expenses and deposits. Ricklefs was advised
to provide evidence that he had ceased commingling funds and had
completed a formal separation of the trust account funds from all other
funds. Brinkmeyer also informed Ricklefs that he had reviewed the
reports from Ricklefs’s 2008 audit and was therefore “well aware of his
records issues from that time.” He stated it was apparent that Ricklefs
had “not attempted to improve either [his] record-keeping or [his] trust
account practices” since the 2008 audit. He went on to state he had
been very lenient with Ricklefs, allowing him more time than necessary
to provide the requested information and prepare the proper records.
Ricklefs was asked to reply promptly and give the matter his immediate
attention.
Ricklefs still had not responded to Brinkmeyer’s email on July 25,
2012. At that time, Brinkmeyer sent a message to the director of the
Office of Professional Regulation that outlined the problems with
Ricklefs’s records and the numerous delays experienced during his
attempts to audit Ricklefs’s files. He indicated that he believed Ricklefs
had “done nothing to improve his practices or record-keeping” since the
2008 audit. He noted the same delay tactics used with McGarvey in
2008 had been employed again. As a result, he requested the Office of
Professional Regulation “consider issuance of a 15-day notice and/or
referral” of Ricklefs “due to his failure to properly prepare or maintain
client trust account records as required, and continuing delays in
providing requested information.”
Following Brinkmeyer’s email, a delinquency notice was sent to
Ricklefs by the Client Security Commission on August 7, 2012. Ricklefs
responded to the commission by letter on August 22. In it, he indicated
9
he had contacted Brinkmeyer and supplied him with additional
documents as instructed. He also noted he was “in the process of
reducing the trust account balance” to include only client funds and a
limited amount of personal funds “to avoid a zero balance.”
Ricklefs went on to assert that his commingling of funds had
stemmed from financial problems related to unpaid medical bills from an
emergency surgery in 2005. He explained his personal bank account
had been “executed upon approximately seven years ago.” Since then, he
was concerned that any account he established for himself would be
vulnerable to garnishment, and he currently had no personal or business
bank accounts. Ricklefs also said he had no vehicle. Because he had no
business or personal bank account and “limited mobility,” Ricklefs said
he “occasionally lacked means by which to process checks drawn upon
non-local accounts.” Ricklefs added that he commonly made payments
to his mother to reimburse her for the use of her credit card and to pay
her for past advances. Because he was now using his mother’s credit
card regularly to pay for personal and professional expenses, Ricklefs
testified at the hearing that he no longer needed to use checks from the
client trust account for those transactions.
C. Client Security Commission Form. During the time
Brinkmeyer was attempting to complete the audit discussed above,
Ricklefs completed and signed his 2012 “Combined Statement and
Questionnaire” for the Client Security Commission. Despite his lack of
recordkeeping and his admitted commingling of personal and client
funds, in the questionnaire Ricklefs indicated that during the 2011
calendar year, he kept all client funds in a separate account, performed
monthly reconciliations of his account with bank statements and client
ledgers, and preserved client fund records for six years.
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II. Procedural History.
The Board filed its complaint against Ricklefs on April 24, 2013.
The complaint began by referring generally to “deficiencies” in the 2008
audit and to Ricklefs’s failure to correct those deficiencies. In more
detail, the complaint alleged problems with the 2012 audit and with
Ricklefs’s responses to the 2012 Client Security Commission
questionnaire. The complaint concluded by alleging Ricklefs had violated
Iowa Rules of Professional Conduct 32:1.15 (safekeeping of property) and
32:8.4(c) (misconduct involving dishonesty, fraud, deceit, or
misrepresentation) and Iowa Court Rules 45.1 (client trust account), 45.2
(action required upon receiving funds, accounting, and records), and
45.7(4) (advance fee and expense payments).
Ricklefs was served with requests for admissions, requests for
production of documents, and interrogatories. He did not respond to
them. On July 31, 2013, the Board filed a motion to compel responses to
the document requests and the interrogatories. Ricklefs did not resist
the motion, and the commission ordered him to serve responses no later
than August 30 or else sanctions would be imposed. Ricklefs still did not
respond. As a result, Ricklefs was precluded from offering any witnesses
or evidence other than his own testimony. He was also barred from
objecting to the Board’s exhibits or from testifying other than in
mitigation. In addition, several facts alleged in the complaint were held
to be established for the purposes of the action.
During the hearing, Brinkmeyer was the Board’s only witness. He
reviewed the circumstances and findings of the 2012 audit. Brinkmeyer
could not explain why it had taken four years from the unsatisfactory
2008 audit to perform a follow-up audit of Ricklefs. Nor could
Brinkmeyer determine that any client had been harmed by Ricklefs’s
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trust account violations. As far as he could tell, trust account funds
used for personal expenses had been earned before being removed from
the account. Brinkmeyer also uncovered instances where Ricklefs had
deposited personal funds into the trust account.
Ricklefs then testified on his own behalf. He admitted he had
“knowingly violated the rules” by using his trust account for personal
purposes. However, Ricklefs claimed he had subsequently put his trust
account in order, removed all nonclient funds, and “been in compliance”
since he began to use his mother’s credit card for his personal and
professional expenses.
Ricklefs admitted he still did not have a personal or business
checking account. He restated his belief that if he opened an account, it
would be executed upon because he had substantial unpaid bills, two of
which had been reduced to judgment. He had not sought assistance of a
debtor–creditor attorney to try to resolve his financial issues in order that
he might obtain a personal or business account.
Despite the absence of harm to any of Ricklefs’s clients, the Board
pointed out that his failure to properly maintain the records for his client
trust account and his commingling of personal funds with client funds
had been ongoing, without improvement, since at least 2008. Ricklefs
closed the hearing by again admitting he had commingled the funds,
while stressing no client funds had ever been jeopardized. He did not
contest the violations and agreed that “a period of suspension . . . is
appropriate.”
The commission issued its written findings of fact, conclusions of
law, and recommended sanction on December 6, 2013. The
commission’s decision focused on the 2012 audit, referring to the prior
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2008 audit as an aggravating circumstance. 1 In doing so, the
commission seemed to follow the lead of the Board, which treated the
2008 audit as a prior incident rather than as a subject of the present
disciplinary hearing. 2 The commission concluded Ricklefs had violated
Iowa Rules of Professional Conduct 32:1.15 and 32:8.4(c) and Iowa Court
Rule 45.1. The commission recommended that Ricklefs’s license be
suspended for a period of thirty days.
III. Standard of Review.
We review attorney disciplinary proceedings de novo. Iowa Ct. R.
35.11(1); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Clarity, 838 N.W.2d
648, 651 (Iowa 2013). The commission’s findings and recommendations
are given respectful consideration, but we are not bound by them. Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Laing, 832 N.W.2d 366, 367 (Iowa
2013).
The Board has the burden to prove the attorney’s misconduct by a
convincing preponderance of the evidence. Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Murphy, 800 N.W.2d 37, 42 (Iowa 2011). “Upon proof
of misconduct, the court may impose a lesser or greater sanction than
recommended by the commission.” Id.
If we find a violation of an ethical rule has occurred, our
determination of the appropriate sanction is guided by the
nature of the alleged violations, the need for deterrence,
protection of the public, maintenance of the reputation of the
bar as a whole, and [the attorney’s] fitness to continue in the
practice of law.
Laing, 832 N.W.2d at 367–68 (internal quotation marks omitted).
1The commission’s decision stated, we believe incorrectly, that Ricklefs had been
publicly reprimanded in connection with the 2008 audit.
2The only evidence the Board introduced regarding the 2008 audit was
McGarvey’s audit report.
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IV. Review of Alleged Ethical Violations.
The commission found Ricklefs had committed all but two of the
ethical violations alleged by the Board. We now consider the alleged
violations.
A. Trust Account Violations. Iowa Rule of Professional Conduct
32:1.15(a) requires a lawyer to “hold property of clients or third persons
that is in a lawyer’s possession in connection with a representation
separate from the lawyer’s own property.” Iowa R. Prof’l Conduct
32:1.15(a). Funds must be kept in a separate account and “[c]omplete
records of such account funds . . . shall be kept by the lawyer and shall
be preserved for a period of six years after termination of the
representation.” Id. The comments to the rule state “a lawyer should
maintain on a current basis books and records in accordance with
generally accepted accounting practice and comply with any
recordkeeping rules established by law or court order.” Id. r. 32:1.15(a)
cmt. 1.
Rule 32:1.15 also incorporates chapter 45 of the Iowa Court Rules,
which directs an attorney on how to properly maintain a client trust
account. See id. r. 32:1.15(f); Iowa Ct. Rs. ch. 45. An attorney must
keep a clearly designated trust account to hold funds received by the
attorney from clients or third parties. Iowa Ct. R. 45.1. “No funds
belonging to the lawyer or law firm may be deposited in this account,”
with the exception of “[f]unds reasonably sufficient to pay or avoid
imposition of fees and charges that are a lawyer’s or law firm’s
responsibility.” Id. r. 45.1(1). Rule 45.2(3)(a) indicates financial records,
including ledger records, bank statements, and check registers, must be
maintained by an attorney for six years following the termination of
representation of a client. Id. r. 45.2(3)(a). Rule 45.7(4) states an
14
attorney must notify a client in writing when withdrawing funds for
expenses or fees from the trust account. Id. r. 45.7(4).
We have previously determined an attorney failed to hold his own
property separate from that of his clients when he “used the trust
account to deposit personal funds and to pay personal and business
expenses.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Hall, 728 N.W.2d
383, 387 (Iowa 2007); accord Iowa Supreme Ct. Bd. of Prof’l Ethics &
Conduct v. Herrera, 560 N.W.2d 592, 594 (Iowa 1997) (“Commingling of
trust funds with the office or personal funds of the lawyer is strictly
prohibited.”).
In Iowa Supreme Court Board of Professional Ethics & Conduct v.
Sunleaf, an attorney used his trust account for the deposit of earned fees
and for the payment of both personal and business expenses to “hide
funds from the federal internal revenue service which had levied on his
business account for two unpaid payroll tax obligations.” 588 N.W.2d
126, 126 (Iowa 1999). We found his conduct violated former Iowa Code
of Professional Responsibilities for Lawyers DR 9–102(A), the predecessor
to rule 32:1.15(a). See id. at 126–27. We did not consider the attorney’s
“pressing financial problems” a legitimate excuse. Id. at 127. As a
treatise points out, the proscription on commingling is partly intended to
protect the client’s property from being levied on by the lawyer’s own
creditors. See 16 Gregory C. Sisk & Mark S. Cady, Iowa Practice: Lawyer
and Judicial Ethics § 5:15(b), at 510 (2013). Had an alert creditor
learned of Ricklefs’s practice of keeping his personal funds in his client
trust account, it might have attempted to levy on that account. Ricklefs
violated rule 32:1.15(a) and rule 45.1.
Additionally, we recently found an attorney violated rule 45.2 when
she failed to keep, with any regularity, a list of clients and the balance
15
each client had in her trust account and was unable to identify the
sources of many of the deposits to her trust account. Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Kersenbrock, 821 N.W.2d 415, 419–20 (Iowa
2012). In that case, the auditor noted “entries in the manual ledger were
sporadic and the trust account register was incomplete.” Id. at 420; see
also Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wengert, 790 N.W.2d 94,
100 (Iowa 2010) (noting an attorney violated this rule when an auditor
“found it was impossible to reconcile the [attorney’s trust] account” as
the attorney had commingled funds, kept inadequate records, and failed
to complete reconciliations); Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Hauser, 782 N.W.2d 147, 152–53 (Iowa 2010) (finding a violation of this
rule when an attorney claimed he regularly maintained client trust
account ledgers, but was unable to produce any ledger for the client in
question); Comm. on Prof’l Ethics & Conduct v. Behnke, 486 N.W.2d 275,
278 (Iowa 1992) (“Behnke’s management of the money in his trust
account and his failure to reconcile his trust account checkbook
balances with bank statements are also violations of our ethical rules.”).
Similar transgressions occurred here. There is no question that
Ricklefs failed to maintain a check register or client ledgers, did not
regularly perform reconciliations, and did not retain bank statements.
Hence, he violated rule 45.2(3)(a). 3
The Board also alleged that Ricklefs failed to notify clients when
withdrawing funds from his trust account as required by rule 45.7(4).
The commission did not find a violation of this rule. We agree with the
commission here. Such activity may have occurred, but the subject was
3The commission found that Ricklefs had failed to maintain adequate trust
account records but did not specifically determine that Ricklefs had violated rule 45.2
as alleged by the Board. We find a violation of this rule.
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simply not explored at the disciplinary hearing. No references were made
to specific clients or specific withdrawals that were alleged to have been
made without notification. Therefore, on this record, we cannot find a
violation of rule 45.7(4).
B. Dishonesty. “It is professional misconduct for a lawyer to . . .
engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation.” Iowa R. Prof’l Conduct 32:8.4(c). “The Board must
prove the attorney acted with some level of scienter greater than
negligence.” Kersenbrock, 821 N.W.2d at 421.
In Kersenbrock, we found a violation of this rule when an attorney
falsely certified she had properly performed trust accounting procedures
in her annual client security questionnaire. Id. Her verified response
stated she kept client funds separate from her own and performed
monthly reconciliations of her trust account with her client ledger
balances and bank statements, but the record showed she could not
have possibly reconciled the accounts because of the inadequacy of her
records. Id.; see also Clarity, 838 N.W.2d at 656–57 (finding a violation
of rule 32:8.4(c) when an attorney falsely certified on his annual
questionnaire that all retainers had been deposited into a trust account);
Wengert, 790 N.W.2d at 100 (“Wengert’s false certification that her trust
account was properly reconciled . . . violated rule 32:8.4(c) . . . .”); Hall,
728 N.W.2d at 387 (finding an attorney who commingled personal funds
with trust account funds committed a further ethical violation when he
“knowingly misrepresented the nature of at least one trust account
transaction to the Client Security Commission auditor”).
Here, Ricklefs submitted a client security questionnaire in 2012
certifying that, for the preceding calendar year, he had kept all client
funds in a separate account from his personal funds, performed monthly
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reconciliations of his trust account with bank statements and client
ledgers, and preserved client fund records for six years. Additionally, on
February 9, 2012, Ricklefs told the Client Security Commission’s auditor
that nonclient funds were not kept in his trust account and that he
reconciled the bank statement to the check register each month.
These statements were intended to mislead the Client Security
Commission. Ricklefs later admitted he did not keep a check register for
his trust account and further admitted he regularly kept personal funds
in that account. It is equally apparent that Ricklefs did not keep client
ledgers, retain copies of bank statements, or perform monthly
reconciliations. We find his knowingly false statements on the
questionnaire and to the auditor violated rule 32:8.4(c).
V. Consideration of Appropriate Sanction.
Having found the foregoing rule violations, we now consider the
appropriate sanction. While there is no template of sanctions for
attorney misconduct, “we try to achieve consistency with our prior cases
when determining the proper sanction.” Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Templeton, 784 N.W.2d 761, 769 (Iowa 2010). When
deciding the appropriate sanction, we consider “the nature of the
violations, protection of the public, deterrence of similar misconduct by
others, the lawyer’s fitness to practice, and [the court’s] duty to uphold
the integrity of the profession in the eyes of the public.” Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Axt, 791 N.W.2d 98, 102 (Iowa 2010) (internal
quotation marks omitted). We also take into account any “aggravating
and mitigating circumstances present in the disciplinary action.” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Parrish, 801 N.W.2d 580, 588 (Iowa
2011). “Although we respectfully consider the discipline recommended
by the Commission, the final decision on the appropriate sanction is for
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this court.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wright, 840
N.W.2d 295, 300 (Iowa 2013) (internal quotation marks omitted).
As we have said recently regarding trust account violations,
This case primarily involves trust account violations.
“Sanctions for trust account and accounting violations span
from suspensions of several months where the violations
were compounded by severe neglect, misrepresentation, or
failure to cooperate, to a public reprimand when the
attorney, in an isolated instance, failed to deposit funds into
his trust account because he believed the fees to be earned.”
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Boles, 808 N.W.2d 431, 442
(Iowa 2012) (citations omitted) (compiling cases). In the cases warranting
more serious discipline, additional violations or other aggravating
circumstances were present. Id.
In this case, Ricklefs improperly handled his trust account,
commingled client funds with his own, failed to maintain proper records,
and also knowingly misrepresented that he was engaged in appropriate
trust account practices. His disregard for the rules governing trust
accounts predated the 2008 audit and, despite being instructed to
comply with the rules after the initial audit, continued through the
period of the 2012 audit without improvement. Ricklefs himself
conceded at the commission hearing that a period of suspension was
appropriate.
We also deem Ricklefs’s efforts to stall the 2012 audit and his
failure to cooperate with the auditor and the Board aggravating factors.
See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cunningham, 812 N.W.2d
541, 551 (Iowa 2012) (noting the failure to cooperate with the Board’s
investigation is an aggravating factor).
An additional aggravating factor is Ricklefs’s past disciplinary
history. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. McCuskey, 814
19
N.W.2d 250, 258 (Iowa 2012) (“Prior discipline is [an] aggravating factor
we consider in determining the appropriate sanction.”). Ricklefs
previously received two public reprimands: one in 1998 for failing to
provide a response to a Board inquiry after requesting two extensions,
and one in 2007 for neglect and lack of diligence during the
representation of a client. In addition, although Ricklefs was not
sanctioned as a result of the 2008 audit, we agree with the commission
that it is certainly an aggravating factor. See Boles, 808 N.W.2d at 442
(“A pattern of misconduct is an aggravating factor.”); see also Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Khowassah, 837 N.W.2d 649, 658
(Iowa 2013) (noting that while private admonishments are not discipline
per se, they can be an aggravating factor because “they put attorneys on
notice not to repeat the conduct”). Ricklefs knew what he needed to do
after the 2008 audit but failed to do it.
We also consider the mitigating factors in this case. As noted
above, there are no indications any clients suffered harm. See
Kersenbrock, 821 N.W.2d at 422 (finding lack of client harm to be a
mitigating circumstance); Boles, 808 N.W.2d at 442 (indicating lack of
harm to clients is a mitigating factor). Additionally, Ricklefs took
responsibility for his actions before the commission and admitted his
violations. See Kersenbrock, 821 N.W.2d at 422 (noting the taking of
responsibility for actions is a mitigating factor).
In determining the appropriate sanction in this case, we draw
guidance from the following attorney discipline cases involving trust
account violations.
In Kersenbrock, we encountered a similar pattern of pervasive trust
account violations. The attorney failed to deposit clients’ retainers into a
trust account, did not keep adequate trust account records, prematurely
20
withdrew fees in a probate case, and misrepresented her trust fund
practices on her annual client security questionnaire. Kersenbrock, 821
N.W.2d at 419–21. There were mitigating circumstances: no clients were
harmed, Kersenbrock had no disciplinary history, and she had
acknowledged the inadequacies in her accounting practices and taken
steps to correct the problems. Id. at 422. We suspended her law license
for thirty days. Id.
In Sunleaf, we were confronted with an attorney who, like Ricklefs,
used his trust account as a conduit for personal funds in order to avoid
creditor claims against his personal assets. 588 N.W.2d at 126. Sunleaf,
like Ricklefs, also falsified his client security questionnaire response. Id.
at 127. There was no evidence of misappropriation of client funds, and
the misconduct was “an aberration, wholly out of plumb with Sunleaf’s
many years of practice which appear to have been honorable.” Id. We
approved a public reprimand while indicating the case was a close call
between a reprimand and a suspension. Id. at 126–27.
In Boles, we found an attorney’s “flagrant, multiyear disregard for
the billing and accounting requirements of our profession” warranted a
thirty-day suspension of his license to practice. 808 N.W.2d at 441, 443.
In that case, the attorney “withdrew unearned fees, delayed responding
to client requests for accurate billings, and failed to promptly refund
unearned fees.” Id. at 441. The situation was compounded by neglect of
a client matter. Id. However, we also considered as an important
mitigating factor the evidence that the attorney had “corrected his
practices to avoid reoccurrence,” and noted the attorney had no trust
account problems in the approximately four years leading up to his
hearing. Id. at 442. Further mitigating factors included Boles’s full
cooperation with the Board’s investigation, his extensive pro bono
21
practice, and the fact that no clients were harmed “apart from the
delayed refunds.” Id.
Hall involved an attorney who repeatedly mismanaged his trust
account, using it to deposit and withdraw personal funds, while not
maintaining a proper ledger of deposits and withdrawals. 728 N.W.2d at
385. At times, the attorney “used the trust account more for his
personal dealings than for client matters.” Id. He also repeatedly failed
to respond to Board inquiries in response to various complaints, forged
client signatures, made various misrepresentations, and neglected cases.
Id. at 385–86. There was no evidence of misappropriation of client
funds. Id. at 386. Nonetheless, we suspended the attorney’s license
indefinitely with no possibility of reinstatement for twelve months. Id. at
389.
In Clarity, an attorney failed to deposit advance fees into his trust
account, failed to provide an accounting to his clients (even after the
clients requested one), made misrepresentations in his certified
responses to his Client Security Commission questionnaire, neglected
client matters resulting in the arrests and incarceration of several
clients, and charged an unreasonable fee. 838 N.W.2d at 655–60. In
addition, he had three recent private admonishments. Id. at 662. We
suspended his license for one year with no possibility of reinstatement.
Id. at 663.
Iowa Supreme Court Attorney Disciplinary Board v. Powell involved
an attorney who “basically ignored the rules and procedures for
maintaining a trust account over a prolonged period of time.” 830
N.W.2d 355, 357 (Iowa 2013). Client funds were deposited into the
attorney’s operating account, the attorney frequently paid funds to
himself when he needed money before the fees were actually earned, and
22
the attorney failed to adequately manage the bookkeeping practices of
the firm. Id. Because of a $43,000 trust account shortage, we had to
temporarily suspend the attorney and appoint a trustee to take control of
the attorney’s trust account. Id. at 356. Although no client funds were
ultimately lost, there were “years of utter disregard by Powell for the trust
fund rules and practices.” Id. at 359. Powell also had a prior
disciplinary record. Id. at 356. We did take into account the attorney’s
prior seven-month interim suspension and ultimately imposed an
indefinite suspension with no possibility of reinstatement for three
months. Id. at 359–60.
In Parrish, a sixty-day suspension was considered the appropriate
sanction for an attorney who “withdrew funds from his trust account
before they were earned, failed to promptly notify his clients of the
withdrawals, did not earn the amounts withdrawn, and did not return
the remainder of funds upon request.” Parrish, 801 N.W.2d at 583.
Parrish’s disciplinary history included six private admonitions, all of
which related to a “failure to provide an itemization of services provided,”
and at least two of which involved withdrawal of funds in excess of the
fees earned. Id. at 589. We concluded the attorney’s conduct over a
period of ten years had “developed into a pattern of violating the Iowa
Rules of Professional Conduct and the rules of this court relating to the
administration of trust accounts.” Id. The refusal or inability to return
client funds was considered an aggravating factor, while the attorney’s
taking responsibility for his actions, taking steps to correct the
accounting issues, community involvement, and pro bono work were
considered mitigating factors. Id.
We believe this case warrants a stiffer sanction than we imposed in
Kersenbrock, Sunleaf, or Boles. Unlike those attorneys, Ricklefs was
23
given a second chance after the 2008 audit but did not mend his ways.
And some of the mitigating circumstances present in those cases are
absent here. Ricklefs tried to delay and deflect the investigation of his
trust account practices virtually up until the December 2013 disciplinary
hearing.
At the same time, the sum total of violations in this case is not
comparable to what happened in Hall or Clarity. There is no indication
that the quality of Ricklefs’s legal work for his clients was ever
compromised. Unlike those two cases, this case involves purely trust
account violations and related misrepresentations.
Parrish and Powell are closer parallels to this case. Ricklefs’s
refusal to correct his trust account practices for years after he was
informed of his deficient recordkeeping is similar to what transpired in
Parrish, where the attorney did not modify his inadequate trust account
and billing practices despite several private admonitions, and Powell,
where the attorney basically ignored proper trust account procedures for
years. One could argue that Parrish and Powell are more egregious than
the present case. There the attorneys repeatedly withdrew funds before
they were earned—an arguably more serious matter than running
personal funds through a trust account. On the other hand, the
misrepresentations in this case could potentially justify a more severe
sanction. Balancing these considerations, we think the sanction here
ought to be in the range of sanctions imposed in Parrish and Powell.
In light of all the foregoing, and particularly Ricklefs’s complete
failure to address the problems noted in the 2008 audit, we believe his
license should be indefinitely suspended with no possibility of
reinstatement for three months.
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VI. Conclusion.
We suspend Ricklefs’s license to practice law in this state with no
possibility of reinstatement for three months from the date of the filing of
this opinion. This suspension shall apply to all facets of the practice of
law. See Iowa Ct. R. 35.13(3). Ricklefs must comply with the notification
requirements of Iowa Court Rule 35.23. Upon application for
reinstatement, Ricklefs shall have the burden to show that he has not
practiced law during the period of suspension and that he meets the
requirements of Iowa Court Rule 35.14. The costs of this proceeding are
assessed against Ricklefs pursuant to rule 35.27(1).
LICENSE SUSPENDED.